Unearned Revenue accounts

[tanveer]

once the shipment is posted(completed) and invoice is not raised, can the system create the following transaction after COGS(debit) stock(credit)

Unearned receivable xx
unearned revenue xx
Once the invoice is raised, the system reverses the above mentioned transaction and posts a new transaction

Receivable xx
Revenue xxx

please advice

[Johnson Joseph]

Hi Tanveer
You have posted a good idea as far as accounting is concerned.
It is possible need to do AD dictionary level settings and probably a minor code change.
Experts from development can give insights into this.

Johnson Joseph

[Armen Rizal (Goodwill)]

Hi,

This is a good feature to develop. It is called Matching Cost Revenue principle. Ideally we want to match the time we recognize the COGS and Revenue in the same period.

Anyway, Tanveer, is your Unearned Revenue account is a Balance Sheet account ? if yes, I think it will break the principle.

Here two kinds of common scenario:
1. Shipment come first. Use COGS Clearing (require Shipment is posted first)

Shipment

COGS Clearing DR
Product Asset CR

Invoice

COGS DR
COGS Clearing CR
AR DR
Revenue CR

1. Invoice come first. Use Unearned Revenue

Invoice

AR DR
Unearned Revenue CR

Shipment

Unearned Revenue DR
Revenue CR
COGS DR
Product Asset CR

Both scenario are not supported yet in Adempiere but with some efforts, you can make your own changes.

Best regards,

Armen Rizal